Former Altus Group Exec Launches New Real Estate Tax Firm
A property tax expert and elected official has launched a new company with the goal of improving tax appeals, an outdated process that he says is in for a reckoning this year because of the coronavirus pandemic.
He is serving as managing partner alongside co-founder and partner Heidi Gilbert, who also previously worked at Altus Group.
Cavalry Real Estate Advisors will provide property tax advice, help owners with tax appeals and perform other related services. The company is using technology to improve the tax appeal process, and Litkenhous said he is looking to raise $2M to launch a platform he envisions as "the TurboTax of real estate tax appeals."
Litkenhous also serves as a member of the Falls Church City Council, an elected position he has held since 2017. He left Altus Group in 2019 and has since focused on the council role and spending time with family.
He previously worked at SC&H Group, where he led a Tysons-based property tax division that he sold in 2014 to Altus Group. He joined Altus Group along with the acquisition and rose from senior director to vice president to global head of business development.
Eventually, he said he grew tired of working for a large corporation that was hesitant to use technology to change the property tax appeal process, a strategy he said is going to be core to Cavalry's business model.
"There has been a lot of talk about developing new tech and dragging those services into the 21st century, but nobody wanted to change," Litkenhous said. "I was pushing and pulling and kicking and scratching to try to innovate and do things for the company that would separate us from the same old thing everyone was providing."
He said launching his own firm gives him the ability to innovate as he sees fit. He said he is using artificial intelligence to speed up the tax appeal process by mining proprietary and public data. It would then feed that data into a model that would determine if there is an opportunity for appeal, the size of that opportunity and how likely it is to succeed.
He said he has built the foundation of this technology and is looking to raise money to build additional applications and machine learning models.
"It's allowing us to do things faster and less expensive than our competitors, and mine data and outcomes from previous appeals and other data sources in the industry to create a better result for our clients," Litkenhous said.
The pandemic has created a host of issues with property tax assessments that Litkenhous said make this a particularly important time for advisory firms like Cavalry.
He said some jurisdictions are making their assessments with information they gathered at the end of 2019, but many properties have seen their incomes drop dramatically during the pandemic, a shift that should bring down their property tax bill. This disconnect is expected to create a wave of tax appeals.
"I haven't seen a more ripe opportunity to appeal tax assessments since 2009," he said. "This will be the busiest year for us in this industry since the Great Recession."
Cavalry plans to work with all types of property owners, but he said it will specialize in retail and mixed-use, property types that he says have complicated valuation processes and have been disrupted by the pandemic.
The company has a small team of employees that are currently working remotely, but Litkenhous said he aims to move into a physical office when it is safe.
Looking ahead, he said he aims to build out the company's technology product in a way that could stand alone and be licensed out to other companies or sold to a proptech firm.
"With the road map I've built, there's a services component and a proptech component," Litkenhous said. "Looking 10 years down the road, I've got the services piece that's still using the proptech we've built, but the tech itself is a stand-alone entity."